Dell is doing just fine. There simply is no market for an Android tablet in the Enterprise which is where Dell now gets most of it's revenue. Amazon is loosing money on each Kindle Fire it sells and early reports have been less than stellar. Apple is in a unique position with iPad which is very popular with Consumers and making it's way into many Enterprises. My prediction is that the only thing that has a chance of challenging iPad is a revamped Windows 8 running on a tablet. I know they are (very) late to the game, but don't count Microsoft out...
Dell is doing just fine. There simply is no market for an Android tablet in the Enterprise which is where Dell now gets most of it's revenue. Amazon is loosing money on each Kindle Fire it sells and early reports have been less than stellar. Apple is in a unique position with iPad which is very popular with Consumers and making it's way into many Enterprises. My prediction is that the only thing that has a chance of challenging iPad is a revamped Windows 8 running on a tablet. I know they are (very) late to the game, but don't count Microsoft out...
I think it is still early in the game. This era has similarities with the frothy mid-1980's where platforms collided and competed.
First, I'm not sure the Amazon can play the scale game in this case. I keep seeing people draw comparisons between the Kindle Fire and video game consoles which are typically sold below cost with profits coming from game sales. Console makers usually license out their development tools to people who want to develop content specifically for that console. I'm not sure that's analogous to a tablet maker trying to recoup costs by selling content that already exists in other forms and isn't specifically developed for that product and can be obtained on other platforms and in other formats. It's a subtle but important difference, and I'll be curious to see how that plays out for them.
Secondly, it seems to me that Kindle Fire's sale numbers are being inflated a bit. People keep comparing Fire sales to iPad and other tablets, but I'm curious how much Amazon has cannibalized their own sales. You'd have to take into account all the Kindles that Amazon would have sold without the Fire before getting a real sense of how much ground the Fire is taking in the tablet market.
Good points. However, I think Kindle has a chance because of the market segment it sells to. The most important fact that will make Kindle competitive is that it doesn't compete with the iPad. I know that may seem like a contradiction, but it isn't. There is a very large market of people that cannot afford an iPad, despite its very good pricing. These people will gravitate to the Fire. Amazon is hoping to build a user base with these people. In 5 years from now, iPad development will have slowed greatly and iPad features will be cheap to build. If the goal is to have a chance at Apple's market, I think Amazon is doing it the right way.
Apple should respond to this threat by producing a 7 inch tablet with more limited features. This device could literally be a big iPod touch. Alternatively or in addition Apple should continue selling the iPad 2 and drop the price by at least a $100 this year and next year. Given Apple's disdain for selling inferior products I'm betting we will see the reduced priced iPad 2 long before we will see a 7 inch iPad. Personally I think they should do both and price the 7 inch iPad at $250 and the iPad 2 at $400. Hopefully Apple will also have an iPad pro with a 2X screen resolution, a quad core processor, and 4G internet. That's the device I'll be buying.
Dell is doing just fine. There simply is no market for an Android tablet in the Enterprise which is where Dell now gets most of it's revenue. Amazon is loosing money on each Kindle Fire it sells and early reports have been less than stellar. Apple is in a unique position with iPad which is very popular with Consumers and making it's way into many Enterprises. My prediction is that the only thing that has a chance of challenging iPad is a revamped Windows 8 running on a tablet. I know they are (very) late to the game, but don't count Microsoft out...
I think Windows 8 might succeed in the phone market, but things are more sketchy for tablets. The problem is Microsoft's current partners don't know how to make money off of a tablet. The magic sauce for PCs was the fact that businesses were the ones making the purchasing decisions and the home PC needed to be compatible with the work PC. That isn't true for tablets. Tablets are used to access email, access the internet, and play simple games. What people look for in a tablet is instant on, good battery life, and small form factor. Unfortunately for Microsoft, none of its partners are any good at any of those things.
I think Microsoft is a logical competitor to Apple, I just haven't figured out how Microsoft's partners are going to make money.
By the way, Google seems to be the least threatening. They don't know how to make software or hardware. The only thing Google had going for it was that it was free and phone manufacturers were desperate for an iPhone knockoff. That isn't the case with tablets.
I think it is still early in the game. This era has similarities with the frothy mid-1980's where platforms collided and competed.
Microsoft was never first back then either.
I think the iPad market is a lot more mature than people realize. In my mind, the iPad market has existed for a decade. The iPad provides three clear functions (i) email access, (ii) internet access, and (iii) inexpensive simple portable gaming.
These features were previously provided by blackberry phones, netbooks, and handheld video game devices. The iPad does all three and it is decimating those markets. The other thing that the iPad does is provides content....music, movies, and TV. The content probably doesn't cause someone to purchase the device, but it contributes substantially to its continued use.
The kindle Fire provides the three benefits, albeit not as well as the iPad, but it does it at a substantially reduced cost. In addition, the Fire produces content. Therefore, I expect the Kindle to be commercially successful.
Even if Microsoft can produce a good operating system, it isn't clear that Microsoft and its partners can make any money doing it and it isn't clear that they will be able to provide content so that people keep using the devices. I'm not saying it is not possible, I just don't think Microsoft is talented or creative enough to make it happen.
Without following this market particularly closely, it seems to me that the main challenge for those wishing to compete with the iPad is that they are creating the impression among casual observers (like myself) that everything besides the iPad is going to flop and be canceled... and who wants to buy into such a system? So, they are losing money in the short term, but to compete they need to create a sense that they are in the market to stay... who is willing to slog it out for 5 years losing money to establish some credibility? Microsoft? (Think of the X-Box's long journey against the Playstation).
this is going to be fun to watch. first the Fire is going to wreck sales of all other Android tabs in this Holiday quarter. and prices for them all will drop to profitlessness. but then - there will be a buyer backlash as the many flaws of the V.1 Fire become apparent and well known, and the brand will become tarnished. all of which combined will sow consumer confusion in the tablet market - except for the tried and true iPad.
yes there will be an improved Fire 2 and ICS Android tablets by next Spring. but there'll be iPad 3 too. so the rest will all be stuck at commodity price levels. then the OEM's will stampede to Windows 8 tablets later in the year, hoping for an escape route to higher prices. but the last thing the world needs is another tablet platform, and that will just muddy the waters further.
I think the Kindle Fire is alot like gaming consoles. Its not about selling the hardware its about having hardware that works well with content. To me the Fire was clearly developed to sell content.
Even before the Fire, Kindle software and apps were available on just about everything, Amazon seems to be focused on selling content to make the profit not hardware.
the problem is, unlike gaming consoles, the content does not have a huge profit margin. Amazon know this...they are just playing a slash and burn strategy to keep new competitors out of the market and from encroaching into their retailing operations.
If that is the Streak, my work issued laptop should be called the Stain. Ha ha, oh well, at least it runs the creditable WinXP and Office 2007, quite a solid platform.
Everyone always says that Amazon sells the Kindle Fire "at cost" or "below cost" but nobody can ever prove it. Yes, someone did a tear down and added up the cost of the parts, and that exceeded $199. But the same is true for most consumer electronics. Companies like Amazon gets bulk discounts that aren't available to others.
Personally, I seriously doubt that Amazon is taking a loss on the Kindle Fire. I'd say it's more likely a "low profit" device. Of course, that's just my OPINION, as it's your OPINION that the Kindle Fire is sold at no/below cost.
I just wish people would stop stating something as "fact" when it's not proven to be so. Just because everyone is saying the same thing doesn't mean it's true. "Even if fifty million people say a foolish thing, it is still a foolish thing." – Anatole France
Dell makes the vast majority of its money in the corporate/enterprise sector these days. As they have been moving more and more in that direction Apple has moved the other way.
No surprises here.
Leave it to DED to fire up bettieblue - self-appointed violent critic and naysayer - the ultimate antifan! LOL!
The question remains, while the Fire is arguably running a flavor(fork) of Android, since it is not native Google, Googles loses access to a part of the tablet space, and currently the only part that seemingly is selling well. It is still too early to tell, but msot of the developers I know that are looking at Fire are wary about Amazon's draconian policies around pricing. Killing the smaller Streaks makes sense in that it fragments the line too much for one OEM.
The difference is that game consoles sold cheap (often loss leader) hardware to an audience that was compelled to buy $50-$70 games in an environment where the only alternative to buying those games was to buy PC games for the same price.
Additionally, PC game makers license their software to build in a platform tax, both during development and in the retail sale. Even so, Sony and MS and Nintendo are not doing really well in making lots of money on console games.
The Kindle Fire is designed to enable users to buy $1-4 apps, rather inexpensive / low margin ebooks and magazines, and browse the web and listen to music. There's plenty of free apps and free music (and most people already have digital music collections). The web is free. There are lots of significantly better clients for browsing the web for the same free cost of doing so.
Amazon has no way to significantly "tax" sales of content. So it can only charge the razor thin margins it has been, which are much lower than general retail. Apple itself takes only a 30% cut in iTunes, and that just better than breaks even Apple's operational expenses.
Amazon is not going to make any money on the Kindle Fire. It's hoping to stay relevant and afloat. The Kindle is looking into the face of death and trying to survive. It is being described as an iPad killer. It is most certainly not.
It's more like Amazon is under siege and has resorted to eating its own children to stay alive. It's desperate.
Comments
Dell is doing just fine. There simply is no market for an Android tablet in the Enterprise which is where Dell now gets most of it's revenue. Amazon is loosing money on each Kindle Fire it sells and early reports have been less than stellar. Apple is in a unique position with iPad which is very popular with Consumers and making it's way into many Enterprises. My prediction is that the only thing that has a chance of challenging iPad is a revamped Windows 8 running on a tablet. I know they are (very) late to the game, but don't count Microsoft out...
I think it is still early in the game. This era has similarities with the frothy mid-1980's where platforms collided and competed.
Microsoft was never first back then either.
A couple of points.
First, I'm not sure the Amazon can play the scale game in this case. I keep seeing people draw comparisons between the Kindle Fire and video game consoles which are typically sold below cost with profits coming from game sales. Console makers usually license out their development tools to people who want to develop content specifically for that console. I'm not sure that's analogous to a tablet maker trying to recoup costs by selling content that already exists in other forms and isn't specifically developed for that product and can be obtained on other platforms and in other formats. It's a subtle but important difference, and I'll be curious to see how that plays out for them.
Secondly, it seems to me that Kindle Fire's sale numbers are being inflated a bit. People keep comparing Fire sales to iPad and other tablets, but I'm curious how much Amazon has cannibalized their own sales. You'd have to take into account all the Kindles that Amazon would have sold without the Fire before getting a real sense of how much ground the Fire is taking in the tablet market.
Good points. However, I think Kindle has a chance because of the market segment it sells to. The most important fact that will make Kindle competitive is that it doesn't compete with the iPad. I know that may seem like a contradiction, but it isn't. There is a very large market of people that cannot afford an iPad, despite its very good pricing. These people will gravitate to the Fire. Amazon is hoping to build a user base with these people. In 5 years from now, iPad development will have slowed greatly and iPad features will be cheap to build. If the goal is to have a chance at Apple's market, I think Amazon is doing it the right way.
Apple should respond to this threat by producing a 7 inch tablet with more limited features. This device could literally be a big iPod touch. Alternatively or in addition Apple should continue selling the iPad 2 and drop the price by at least a $100 this year and next year. Given Apple's disdain for selling inferior products I'm betting we will see the reduced priced iPad 2 long before we will see a 7 inch iPad. Personally I think they should do both and price the 7 inch iPad at $250 and the iPad 2 at $400. Hopefully Apple will also have an iPad pro with a 2X screen resolution, a quad core processor, and 4G internet. That's the device I'll be buying.
Dell is doing just fine. There simply is no market for an Android tablet in the Enterprise which is where Dell now gets most of it's revenue. Amazon is loosing money on each Kindle Fire it sells and early reports have been less than stellar. Apple is in a unique position with iPad which is very popular with Consumers and making it's way into many Enterprises. My prediction is that the only thing that has a chance of challenging iPad is a revamped Windows 8 running on a tablet. I know they are (very) late to the game, but don't count Microsoft out...
I think Windows 8 might succeed in the phone market, but things are more sketchy for tablets. The problem is Microsoft's current partners don't know how to make money off of a tablet. The magic sauce for PCs was the fact that businesses were the ones making the purchasing decisions and the home PC needed to be compatible with the work PC. That isn't true for tablets. Tablets are used to access email, access the internet, and play simple games. What people look for in a tablet is instant on, good battery life, and small form factor. Unfortunately for Microsoft, none of its partners are any good at any of those things.
I think Microsoft is a logical competitor to Apple, I just haven't figured out how Microsoft's partners are going to make money.
By the way, Google seems to be the least threatening. They don't know how to make software or hardware. The only thing Google had going for it was that it was free and phone manufacturers were desperate for an iPhone knockoff. That isn't the case with tablets.
I think it is still early in the game. This era has similarities with the frothy mid-1980's where platforms collided and competed.
Microsoft was never first back then either.
I think the iPad market is a lot more mature than people realize. In my mind, the iPad market has existed for a decade. The iPad provides three clear functions (i) email access, (ii) internet access, and (iii) inexpensive simple portable gaming.
These features were previously provided by blackberry phones, netbooks, and handheld video game devices. The iPad does all three and it is decimating those markets. The other thing that the iPad does is provides content....music, movies, and TV. The content probably doesn't cause someone to purchase the device, but it contributes substantially to its continued use.
The kindle Fire provides the three benefits, albeit not as well as the iPad, but it does it at a substantially reduced cost. In addition, the Fire produces content. Therefore, I expect the Kindle to be commercially successful.
Even if Microsoft can produce a good operating system, it isn't clear that Microsoft and its partners can make any money doing it and it isn't clear that they will be able to provide content so that people keep using the devices. I'm not saying it is not possible, I just don't think Microsoft is talented or creative enough to make it happen.
Let Dell try altering Windows and watch Balmer take an axe to his grill.
LOL!
And uh, why is that Streak only being sold in China? Could it be that it violates some patents in the states? Huuuummmmm!
Amazon Kindle Fire will burn a large percentage of the Android tablet sales, Amazon Kindle has a die-hard Apple-like fan base.
yes there will be an improved Fire 2 and ICS Android tablets by next Spring. but there'll be iPad 3 too. so the rest will all be stuck at commodity price levels. then the OEM's will stampede to Windows 8 tablets later in the year, hoping for an escape route to higher prices. but the last thing the world needs is another tablet platform, and that will just muddy the waters further.
Felt like old times.
I think the Kindle Fire is alot like gaming consoles. Its not about selling the hardware its about having hardware that works well with content. To me the Fire was clearly developed to sell content.
Even before the Fire, Kindle software and apps were available on just about everything, Amazon seems to be focused on selling content to make the profit not hardware.
the problem is, unlike gaming consoles, the content does not have a huge profit margin. Amazon know this...they are just playing a slash and burn strategy to keep new competitors out of the market and from encroaching into their retailing operations.
Personally, I seriously doubt that Amazon is taking a loss on the Kindle Fire. I'd say it's more likely a "low profit" device. Of course, that's just my OPINION, as it's your OPINION that the Kindle Fire is sold at no/below cost.
I just wish people would stop stating something as "fact" when it's not proven to be so. Just because everyone is saying the same thing doesn't mean it's true. "Even if fifty million people say a foolish thing, it is still a foolish thing." – Anatole France
Leave up to DED to fire up the Fan Base!
Dell makes the vast majority of its money in the corporate/enterprise sector these days. As they have been moving more and more in that direction Apple has moved the other way.
No surprises here.
Leave it to DED to fire up bettieblue - self-appointed violent critic and naysayer - the ultimate antifan! LOL!
The question remains, while the Fire is arguably running a flavor(fork) of Android, since it is not native Google, Googles loses access to a part of the tablet space, and currently the only part that seemingly is selling well. It is still too early to tell, but msot of the developers I know that are looking at Fire are wary about Amazon's draconian policies around pricing. Killing the smaller Streaks makes sense in that it fragments the line too much for one OEM.
The difference is that game consoles sold cheap (often loss leader) hardware to an audience that was compelled to buy $50-$70 games in an environment where the only alternative to buying those games was to buy PC games for the same price.
Additionally, PC game makers license their software to build in a platform tax, both during development and in the retail sale. Even so, Sony and MS and Nintendo are not doing really well in making lots of money on console games.
The Kindle Fire is designed to enable users to buy $1-4 apps, rather inexpensive / low margin ebooks and magazines, and browse the web and listen to music. There's plenty of free apps and free music (and most people already have digital music collections). The web is free. There are lots of significantly better clients for browsing the web for the same free cost of doing so.
Amazon has no way to significantly "tax" sales of content. So it can only charge the razor thin margins it has been, which are much lower than general retail. Apple itself takes only a 30% cut in iTunes, and that just better than breaks even Apple's operational expenses.
Amazon is not going to make any money on the Kindle Fire. It's hoping to stay relevant and afloat. The Kindle is looking into the face of death and trying to survive. It is being described as an iPad killer. It is most certainly not.
It's more like Amazon is under siege and has resorted to eating its own children to stay alive. It's desperate.
Well said. +1.